The following information is available for Lock - Tite Company, which produces special - order security products and uses a job order costing system. April 30 May 31 Inventories Raw materials $ 44, 000 $ 58,000 Work in process 10,000 20, 200 Finished goods 61,000 33, 700 Activities and information for May Raw materials purchases (paid with cash) 189, 000 Factory payroll (paid with cash) 250,000 Factory overhead Indirect materials 15, 000 Indirect labor 57, 500 Other overhead costs 93, 500 Sales (received in cash ) 1,900,000 Predetermined overhead rate based on direct labor cost 55% Raw materials purchases for cash. Direct materials usage. Indirect materials usage. Prepare journal entries for the above transactions for the month of May.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
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